Pressure goes up on LIC

Senior Federated Farmers officials believe dairy genetics company Livestock Improvement (LIC) must front up and pay compensation to farmers affected by the Matrix mutant heifer issue.

LIC has confirmed about 900 farmers including about 400 in the Waikato are affected, with about 1500 heifer calves nationwide estimated to be carriers of what it calls a “naturally occurring” genetic mutation.

The mutation was passed to the calves via inseminations from their sire, the LIC commercial dairy bull Matrix, which inherited the condition from its sire, the holstein-friesian bull Halcyon. LIC and farmers are worried only about the estimated 1500 female carriers, which could pass the mutation on if they were mated.

Unusual features of some of the defective female dairy calves include excessive hairiness, failure to milk properly when they get older and a lack of heat tolerance.

LIC, a Hamilton-based farmer-owned co-operative, is recommending farmers either humanely cull any calves that are carriers, or use or sell them as beef animals. But it has said it will not pay compensation, which it has previously calculated could involve up to $1.95 million.

Federated Farmers Waikato president James Houghton believes compensation should be paid to the farmers because the issue came down to “expecting LIC to do their job properly”.

“From my own experience LIC have over-sold things in the past, and it may be that just catching up with them a bit. It is understandable there are genetic mutations, quirky things like that are going to happen, but I think there should be some compensation,” he said.

Dairy section vice-chairman Andrew Hoggard said Federated Farmers did not yet have an official position on the issue, as everyone was “head down, bum up” with calving.

“We're looking at it and discussing it, and will form a complete view on it and what we feel should be happening. The general feeling is there's a lot of concern about this issue,” he said.

“My personal view is there needs to be formal compensation for these farmers. "Whether it's the full amount they want or not is not for me to say individually but a better deal has to be made for these guys.”

LIC's reason for not compensating farmers is that the mutation was “naturally occurring”, meaning it did not occur as a result of anything LIC did, and because LIC did not know about the mutation when it sold the inseminations. It said no genetics company in the world had been known to compensate in similar circumstances.

Suggestions for compensation ranged from a total of $30,000 to refund the 1500 affected inseminations to $1.95 million or $1300 for each carrier heifer.

In the 2011-12 financial year, LIC reported a net profit after tax of $24.4 million. It paid a $4.7 million credit to its co-operative members who were early adopters of genomic technology, to compensate them for lower-than-predicted results. This credit was unrelated to the Matrix issue.

Hoggard said he was also concerned about the LIC advice to use the affected Matrix heifers for beef.

“Personally I wouldn't want to eat a Big Mac out of one of them. I'm sure scientifically it's safe to eat but on a pure emotive level, I'd pass on that for a steak.”

The Waikato Times asked LIC how it knew the animals were safe to eat. Communications manager Clare Bayly declined to comment because the question had not been put directly to LIC by any farmers.

LIC initially responded to questions from the Waikato Times this week, including confirming it would not pay compensation and that its advice remained that affected heifers should be culled or reared for beef.

But Bayly then said farmers should put their questions direct to LIC, so the company could "listen and respond to their concerns".

“Part of being a farmer co-operative means working with farmers wherever and whenever needed, and . . . the most constructive discussions are those which involve the people directly affected,” she said.

Meanwhile, affected farmers have told the Waikato Times they are talking to each other in the hope a united front will encourage LIC to pay compensation. South Waikato dairy farmer Craig Littin, who has 10 affected heifers, said his phone had been “ringing off the hook with concerns from farmers from Northland to Southland” since he raised the issue publicly last week.

Roger Blunt, a Karapiro farmer with four affected heifers, said he had multiple concerns about LIC's handling of the issue, particularly potential impacts on the dairy industry and country.

All the defective animals should be culled to protect New Zealand's international trade reputation, he said.

“My biggest concern is the possible impact it could have on the export market. Our reputation is on the line because New Zealand produces a great article in terms of dairy heifers, dairy products and food, fullstop. All these animals should be culled to get them out of the dairy line.

“LIC needs to get onto it quickly and just solve it. For $2 million they could get all the animals out of the livestock system and accept responsibility for the situation. They have stuck their head in the sand over this issue but it's not just going to go away.”

Blunt said he was concerned LIC first became aware of problems last year, but did not let all affected farmers know until March this year.

“It has cost me $15,000 to graze these animals through the winter because LIC were so slow in coming back to us to identify which animals were affected.”

He was concerned young farmers caught up in the issue would be hit hard financially. “A young sharemilker might have 10 of these animals - that's their lifetime savings building up to moving forward in the industry.”

Blunt was also concerned some farmers might not know they had any of the animals, as not all affected heifers showed physical signs of the mutation.

“Some of these heifers will slip through the net because they look normal. There's no reason someone couldn't buy those heifers and submit them for export.” Of his four animals that DNA-tested positive for the mutation, two were excessively hairy and two were not.

LIC is offering farmers free genetic tests to identify Matrix calves with the mutation.

LIC said it had been commended for the speed with which it isolated the genetic mutation by the BoviQuest Science Advisory Board, which reviews the quality, content and direction of LIC's science programme. Members included Dr Dorian Garrick, previously from Massey University now of Iowa State University, and Dr Howard Jacob of the College of Wisconsin.

LIC said the mutation occurred naturally during formation of the embryo that became the bull Halcyon, which LIC progeny-tested in 2008. Halcyon was never used commercially, but its son Matrix was a late replacement in the 2010 LIC bull team carrying out 12,345 inseminations. These inseminations resulted in about 6000 calves, about 3000 of which were heifers and about 1500 of which were estimated to be carriers of the genetic mutation.

Dr Richard Spelman, LIC's research and development general manager, said the first signs something was wrong was in October 2011, when farmers expressed concern over excessive hairiness of some Matrix heifers. DNA samples from some of Halycon's daughters, which were also excessively hairy, were sent to the US for genotyping before Christmas, and LIC scientists worked to identify the gene responsible - leading to “a real eureka moment” around the middle of March, Spelman said.

Discovering the mutation was "nothing short of sensational".

"We'd discovered a mutation which has never been observed in a raft of animal species.”

Spelman said the mutation would never happen again at LIC, as all bulls were now screened for it.

Bayly said LIC stopped all sales of Matrix semen in November 2011.

“Any orders for the bull after that date were met with advice that the bull was no longer available.” Some farmers have expressed concern Matrix was still on the LIC website this year but Bayly said this was an archived page. Matrix and Halcyon were in isolation awaiting a place at the works to be killed.


Livestock Improvement (LIC), which sold the inseminations from the bull Matrix, said farmers with concerns should contact LIC. South Waikato farmer Craig Littin, who first raised concerns publicly about Matrix calves through the Waikato Times, said farmers with concerns could contact him by email on

Waikato Times